Interim report Q1, January - March 2022

Summary January - March 2022

• Net sales amounted to SEK 75.6 (70.4) million, an increase of 7.4 percent. In local currencies growth was 1.2 percent.

• EBIT was SEK -0.2 (6.0) million, with an EBIT margin of -0.3 (8.5) percent.

• Profit/loss after tax amounted to SEK 1.4 (6.5) million.

• Earnings per share before/after dilution amounted to SEK 0.07 (0.35).

• Cash flow from operating activities decreased to SEK 5.5 (9.4) million.

CEO’s comments

We notice an increased activity in the market and during the first quarter, MSAB has signed several strategically important contracts which entail a deepened engagement with our customers. Our solutions are becoming a strategically important part of their way of handling the chain of evidence.

The first quarter of 2022 saw record high sales amounting to SEK 75.6 million compared to SEK 70.4 million last year, an increase of 7.3 percent. Profit/loss after tax came in at SEK 1.4 million compared with SEK 6.5 million the previous year. This result is a consequence of the product mix sold and an increase in other expenses. Activity increased significantly during the quarter attributable to fairs, training and travel together with non-recurring expenses for market investments, consulting services and lower contributions from the Formobile project, resulted in other expenses being higher than the corresponding period in 2021. Cash flow from operating activities amounted to SEK 5.5 million compared to SEK 9.4 million for the corresponding period in 2021.

This first quarter sales result follows immediately after a strong fourth quarter and record sales for 2021 in total. The reorganisation we implemented during the second half of 2020 plays an important part in the Company’s continued growth. To operate within the mobile forensics industry is to operate within one of the most rapidly changing branches in the world. Our organisation has what it takes to stay on top and continue delivering the best solutions to our customers.

Demand for our solutions is strong; the first quarter is normally the weakest for sales relative to the full year. We have succeeded relatively well at managing our deliveries considering the current uncertainties in the logistics supply chain. If we had not had the uncertainty that we now have, sales would have been higher. My view is that the delivery situation will continue to remain uncertain but that this will not affect us significantly.

Sales were evenly distributed and it was particularly gratifying that North America continued to grow. Europe is still our largest market, with a strong quarter in 2021 and continuing strong in 2022.

MSAB’s solutions are becoming increasingly important to our customers. Customer assignments are deepening as the solutions we deliver truly impact the efficiency of their efforts to investigate and resolve suspected crimes.

MSAB’s work is becoming increasingly critical for our societies. As we have described earlier, we have been deeply engaged for several years in an EU financed project Formobile. The purpose of Formobile is to establish a standard for how law enforcement agencies in Europe should work with the end-to-end mobile forensic investigation chain in general and specifically for mobile phones. The work is in its final phase and the results will be presented this spring.

During the first quarter, the tragic conflict playing out in Ukraine impacted the whole world. MSAB was of course also affected by the conflict - partly in that it is generally harder to predict the delivery of goods. MSAB has not had any sales in Russia or Ukraine so we see no direct impact on sales thus far.

As a direct consequence of the conflict, EU lands and many authorities have understood the value of having access to technology developed by a company that is subject to EU law. MSAB is the only mobile forensic company with its development and headquarters located within the EU. I am convinced that the value MSAB provides law enforcement agencies in trusted countries will continue to increase.

As an investor in MSAB, it is important to value the Company in the long-term, and moving forward we will continue to see variations in profit between quarters.

Stockholm, April 2022
Joel Bollö, CEO MSAB